Holding Company: GroupM

From privacy to piracy, GroupM takes its advocacy muscle all the way to Washington

MEDIA has selected WPP’s GroupM as its Holding Company of the Year, and it’s not for its size (although it is immense and oversees several global agency networks and specialist agencies). This year, GroupM gets the honor for its efforts addressing several issues of critical importance to the advertising and marketing industries, including both online privacy and piracy.

In addition the company continued to invest in addressable TV technologies, which enable marketers to target individual households with more relevant ads. (Think diaper advertising for new parents, or kitty litter for pet owners.) Such techniques — and their successful implementation — are seen as essential to the future vibrancy of the TV medium.

On the daily operations front, the company put its fourth media agency network — Maxus — on the map in 2011. (GroupM also oversees Mindshare, MEC and MediaCom.) Maxus started as a planning boutique several years ago, but with the resources of GroupM behind it this year completed the transition to a full-service global operation. The shop’s recognition factor was elevated with two huge wins, including the $1-billion SC Johnson worldwide media account and the North American portion of the nearly $1-billion NBCUniversal assignment.

Over the past two years, the firm is credited with doing more than any other advertising company to advance the cause of the industry’s self-regulatory position on privacy. Online behavioral advertising techniques have been under fire from public-interest groups and Washington regulators who, fearing abuses, want to put legal restrictions on data collected by marketers and agencies.

The industry’s response: formulate a strategy to convince those groups that self-regulation, with consumer friendly opt-out mechanisms, is the best solution to their concerns. If legislation is put in place that curbs data collection, the industry argues, online advertising will be less effective, and more costly to marketers, who would pass the higher costs on to consumers. It would also likely lead to reductions in ad spending which, in turn, would result in industry job cutbacks.GroupM was a key strategic and tactical player in the development of two of the biggest industry initiatives to date in the drive for a permanent self-regulatory privacy standard. The company’s effort was led by John Montgomery, COO of GroupM Interaction.

Protecting Consumer Privacy

The first effort was a public-service campaign called Privacy Matters, which was spearheaded by the Interactive Advertising Bureau, and was designed to educate consumers about the data that is collected by the industry and how it is used. The campaign also sought to spell out steps consumers could take to protect their privacy online and even decline to be tracked or targeted by advertisers at all.

David Doty, senior vice president and chief marketing officer at the IAB, recalls that from the earliest planning stages of that campaign, “GroupM stepped forward and volunteered all their capabilities to allow us to achieve this.”

And the campaign, which ran throughout 2010, “would not have happened without John’s help,” says Doty, referring to Montgomery. “He was a critical and collaborative partner.”

Montgomery brought in Trevor Kaufman, CEO of digital shop Schematic (since re-branded as Possible Worldwide), on board to assemble a team that came up with the campaign’s creative content and Web design. Media shop MEC was enlisted to place the spots and do the return-on-investment analytics.All of the work was pro bono, and Doty says the GroupM team “pushed us to think more creatively, even beyond our comfort levels.” The tagline on the campaign was “Advertising Is Creepy.” But, says Doty, “we then set about disproving it.”

Doty says the results were well beyond expectations. The campaign resonated with consumers, he says, noting that weekly traffic to the IAB Web site soared 60 percent. Some 3.4 million consumers sought more information by rolling over the campaign’s banner ads to view the full messages. Earned media was extensive, with 17.2 million media impressions from coverage of the campaign. Also, more than 1,000 tweets about Privacy Matters were posted in the first three weeks of the campaign.

GroupM’s commitment to advancing the industry’s privacy agenda rolled right into the next major industry initiative — the development of an icon that could be placed in online ads to provide Web surfers with an option not to receive or be tracked by ads.

According to GroupM’s Montgomery, the firm’s participation in the development of the icon began after a conversation with IAB president Randall Rothenberg in late 2009. When Rothenberg indicated that his organization, along with other members of the Digital Advertising Alliance, was working on the icon project, Montgomery offered to help.

He put together a team cherry-picked from a number of companies within WPP, including Ogilvy & Mather, Kantar, GroupM Interaction and trading platform Xaxis. The team was tasked with designing an icon and coming up with alternative ways to implement it industry wide.It was Ogilvy that designed the early iterations of the icon that is in place today. The shop created about 100 different versions that were narrowed down with research assistance from Kantar, Montgomery says.

According to Mike Zaneis, senior vice president for public policy at the IAB, the final Ogilvy design ran into trademark issues. So the DAA did some tweaking to come up with the icon that was launched in April and is now seen in an estimated 20 billion daily online ads, according to IAB estimates. “We believe the vast majority of targeted ads are carrying the icon,” says Zaneis.

As to GroupM’s contribution, Zaneis says the holding company “showed remarkable leadership and foresight in the area of consumer privacy and industry self-regulation. They were the first ad agency to join the cross-industry effort and they understood that consumer protection was good for the industry and good for the business.”

“The more we can get the self-regulatory message out there that the industry wants consumers to understand how we collect data and what we do with it, the better it is for everybody,” Montgomery adds. What is good for the consumer benefits the business, “and ultimately it benefits a free Internet. And that’s kind of the point,” of the entire effort, he says.

Montgomery says that he’s also working with the industry on the adoption of similar techniques for the mobile world, including ongoing discussions with the Mobile Marketing Association. “It’s more complex given the screen size,” he says. But the company has made some progress. For example, it has drafted guidelines that call for publishers to mask so-called “universal unique identifiers,” which are on every phone. Mobile opt-out alternatives have also been proposed. But mobile privacy policies are a “work in progress,” Montgomery says.

Rob Norman, CEO of GroupM North America, says that Montgomery “has become the front man in some ways” on the privacy issue. Indeed, as the IAB’s Zaneis notes, the industry thought highly enough of Montgomery’s leadership role and communications skills on the issues that he was asked to testify before a Congressional committee in March.

“It’s critical,” says Norman, to gain acceptance for the industry’s self-regulatory stance on privacy. “If our ability to collect and use data is legislatively restricted, it would be a less efficient world and more costly to go to market.”

Stopping Piracy

GroupM is also credited with taking effective steps this year to thwart content piracy, a separate but important industry issue. The holding company was first among its peers to enact a company-wide policy that prohibits client ads from appearing on Web sites that support piracy or distribute illegally obtained content.

To give the policy teeth, the company created a list of 2,000 offending U.S. Web sites that vendors are contractually prohibited from placing GroupM client ads on. “Pirates stay alive by advertising and selling subscriptions,” says Montgomery. “So when we asked ourselves what we could do, we determined that our best option was to help choke off the advertising path. And every single insertion order has language that “bans GroupM clients from any site on the list of offenders.” The company works with verification firms to make sure that vendors avoid those sites on the list. “It’s a rare exception that there’s a violation, so it’s working,” says Montgomery.

And while piracy more directly effects vendors, Norman says that GroupM’s position was more about “what we thought was right as opposed to what we felt we had to do. We believe fundamentally that people who own intellectual property have the right to give it away [or not] of their own free will. Piracy is inherently wrong.”And content owners appreciate the stand that GroupM has taken. “GroupM has recognized that digital theft and counterfeiting on the Internet pose a serious threat to the entire U.S. economy,” says Rick Cotton, executive vice president and general counsel at NBCUniversal.

Cotton says that NBCU applauded the leadership that GroupM had shown by “taking concrete steps to prevent their clients’ ads from providing financial support to illegal sites that kill U.S. jobs.” He also credited them with devising a “reasonable and workable policy, which leads the way toward establishing the broadband Internet as a pillar of the 21st-century economy under a rule of law, rather than as a back alley of illegal activity.” Advancing Addressable TV

Separately, GroupM has been a consistent advocate for the advancement of addressable TV technology. It has invested in a number of firms including Invidi and Visible World, two of the leaders in the space.

“We believe that offline and online addressability is a prerequisite for the future efficiency of the system overall,” says Norman. It’s hard to know when the industry will get to a fully-scaled addressable national TV platform, Norman acknowledges. “But if you aggregate the addressable TV homes” that already exist on various platforms today, he says, “you get to meaningful numbers, where you not only learn a lot but can also use the output to help model the rest of the media you buy. So that’s beneficial.”

Meanwhile, the holding company continued to pour resources into Maxus, the smallest of its four main media shops. The results paid off handsomely this summer when it won three big accounts. In addition to SC Johnson and NBCU, Maxus also won the $150-million global Barclays media assignment.

The Maxus strategy has been to offer clients “the feel and benefits of a small-agency culture backed up the power and resources of GroupM,” says Kelly Clark, global CEO at Maxus.

GroupM — and WPP for that matter — bring a lot to the Maxus offering, including an econometric modeling practice, and an array of specialist units for services such as local broadcast and print buying, as well as data from research arm Kantar and even direct marketing expertise from Wunderman. Maxus in turn provides clients with planning expertise across all communications channels, national TV buying, digital trading and a data and analytics practice.

Kelly credits GroupM and WPP management with supporting the shop’s expansion effort. “It’s been unflinching from day one,” he says. “Every single investment I’ve asked for, from talent to technology, was okayed.”

That, Norman says, is why GroupM exists. “While the org chart may say otherwise, we really work for them,” he says of the agencies under the GroupM banner. “Clients don’t appoint us, they appoint agencies. Maxus has done an incredible job.”